Auto Retail Agenda: 7 December 2020
06 December 2020
- VERTU COMPLETES BMW PURCHASES FROM INCHCAPE
- PORSCHE RETAIL GROUP MARGIN GROWS TO 3.1%
- RETAILERS BACK AGENCY MODEL
- AUTO RETAIL LIVE TO SET 2021 AGENDA
- DCH MILLBURN IS ‘BEST US DEALER’
- BARBER OPENS IN AUTO RETAILER
- STOCKWATCH – Halfords reaches two-year high
- COMING UP – Auto Retail Live
- DEFERRED VAT REPAYMENT PROCESS OUTLINED
- ‘POUND COULD COLLAPSE’ IN NO-DEAL BREXIT
Vertu completes BMW purchases from Inchcape
Vertu is understood to have completed the purchase of five BMW and Mini businesses from Inchcape, plus one BMW Motorrad business and a used car site.
Auto Retail Agenda sources say the deal was completed on Friday with a stock market announcement planned for tomorrow, Monday, 7 December.
It is understood that Vertu paid less than £1 million in goodwill for the businesses and that the financing for the dealerships is being supported by a long-term mortgage from BMW Financial Services.
The BMW Mini sites are located in Durham, Malton, Stockton, Sunderland and York. The used car site is in York and the Motorrad in Sunderland.
Vertu has brought in BMW expert Anthony Masterson to run the division and turn around the loss-making sites. Mr Masterson was a partner in Knights BMW which sold to Lookers in 2016 and has more recently been Marshall Motor’s BMW division boss.
The sale by Inchcape is thought to be part of a plan to sell-off the retailer’s entire BMW portfolio which stood at 12 franchises at the start of the year.
Meanwhile, Vertu is also understood to have also bought an empty property in Glasgow from Lookers, next door to its Ford and Nissan showrooms. Vertu will run the site as a used car operation under the Macklin Motor Nation banner. Vertu has a habit of adding sites as used car operations which it later fills with a franchise. The ex-Inchcape York used car site will be operated under the Bristol Street Motor Nation banner.
Porsche Retail Group profits hits £10m
Porsche Retail Group saw profit before tax grow from £8m to £10m in the year ended 31 December 2019. Turnover also grew from £304m to £325m, with return on sales rising from 2.6% to 3.1%. The business reported steady growth in aftersales thanks to increasing new car sales, while improving customer satisfaction is helping it retain customers rather than seeing them move to other Porsche franchises or independent repairers. The directors say the business will remain profitable in 2020 despite the impact of Covid-19.
Retailers back agency model
The current auto retail business model is not sustainable and dealers are keen for OEMs to move to an agency selling model, concludes a pan-European and China report by Capgemini. An agency model would facilitate online sales as OEMs would set prices, eliminating haggling. “The great thing about the agency model is that intermediaries can’t take a slice,” said Vertu CEO Robert Forrester. It would “lead to a more transparent process for the customer,” said Marshall CEO Daksh Gupta. A customer desire for a more online-based sales experience cannot happen without an agency-style model, added Steve Young from dealer analyst firm ICDP.
Auto Retail Live to set 2021 agenda
Robert Forrester, Gravells Motors’ Jonathan Gravell, Shelbourne Motors’ Paul Ward and Rapid RTC’s Darren Preddy will discuss the year ahead in this Thursday’s Auto Retail Live briefing. Join online at 2pm to hear some of the most successful operators in the industry talk about how 2020 lockdowns have changed consumer behaviour, what retailers should do about Brexit, whether start-up tech firms such as Cazoo and Cinch will be successful, and why we haven’t seen a shift to agency agreements yet.
It’s free to join, your questions are welcome, and you can sign-up here.
DCH Millburn is ‘best US dealer’
DCH Millburn Audi New Jersey has been named the best retailer to work for in Automotive News’ ninth annual 100 Best Dealerships To Work For survey. The retailer has been a regular top-rated business, with success metrics including a voluntary turnover rate of 19%, well below the industry average. Around 25,000 retailer employees responded to the 2020 survey.
Barber opens in auto retailer
A former Universal Studios make-up artist has set up shop in Chipman & Taylor Chevrolet in Washington State after owner (and client) Fran Amend offered the use of a room at the site. Jennifer Siegrist’s former shop was forced to indefinitely close due to Covid-19. The new site is “perfect… full of bright, natural light” she said, while also praising Amend for helping with start-up costs for the new auto barber.
Closing prices on 4 December 2020 and weekly change
Halfords reaches two-year high
Auto Trader Group 557.2p (+9.0p / +1.6%)
Cambria 59.5p (+4.0p / +6.9%)
Caffyns 385.0p (-40.0p / -9.8%)
Halfords 273.0p (+4.5p / +1.6%)
Inchcape 632.0p (+34.0p / +5.5%)
Lookers Shares suspended at 21.0p
Marshall Motor Holdings 136.0p (-3.0p / -2.1%)
Motorpoint 303.5p (-4.5p / -1.4%)
Pendragon 13.56p (+0.04p / +0.2%)
Vertu 27.95p (-3.2p / -10.8%)
Monday, retail sales
Thursday, Auto Retail Live: Outlook for 2021. Sign-up here.
Deferred VAT repayment process outlined
HMRC has outlined the process for repaying VAT deferred during the first Covid-19 lockdown. Businesses can repay in interest-free instalments, from two to 11 equal monthly payments, with the full amount to be paid by the end of March 2022. Businesses must opt in (and pay the first instalment) before the end of March 2021, and are required to use Direct Debit. “Access to the scheme may be blocked for those with outstanding returns,” warned MHA’s VAT director Glyn Edwards.
‘Pound could collapse’ in no-deal Brexit
Business leaders have warned ministers the pound could collapse if a Brexit trade deal cannot be struck. CBI deputy director John Hardie has warned “things look very stark” without a Brexit deal – both for the UK and the other 27 EU states. “What’s the No 1 priority for all the countries in the EU? To tackle the unemployment and economic damage that’s been done by the pandemic.”
However, the IoD’s Allie Renison said businesses were expecting a deal to be struck. Bank of England forecasts are based on the expectation a deal will be struck, with a forecast 1% decline in GDP for Q1 2021.